John Contributes Cash in Exchange for Capital for His Business

question 141

Multiple Choice

John contributes cash in exchange for capital for his business, Bubble Wraps Inc. The two accounts involved in this transaction are:

• A)Bubble Wraps, Capital account and the Cash account.
• B)the Cash account and John, Capital account.
• C)John, Payables account and the Capital account.
• D)Bubble Wraps, Capital account and John, Payables account.

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Definitions:

Quantity Demanded

The total amount of goods or services that consumers are willing and able to buy at a specific price level, at a given point in time.

Normal Good

A type of good for which demand increases as the income of consumers increases, and vice versa.

Supply Schedule

A table of numbers showing the amounts of a good or service producers are willing and able to make available for sale at each of a series of possible prices during a specified period of time.

Price-Elasticity

A measure of how the quantity demanded or supplied of a good changes in response to a change in its price.